Woman trouble

Problems females face — and ideas they come up with to solve them — create products for this entrepreneur.

By Sam Boykin

It has taken Mike Sherman at least six weeks to set up this meeting. In a room at The Home Depot’s Atlanta headquarters, he and his sales manager lay out tools the chain carries and ask their host how customers are supposed to open the plastic clamshell packaging. They’ve got the answer: a clipperslike device that is Mooresville startup Zibra LLC’s first product.

The Home Depot buyer does little more than nod until, 10 minutes into their spiel, he announces, “I’m not trying to figure out if I’m going to buy it, I’m just trying to figure out where I’m going to put it and whether or not I can get it in before Christmas.” It’s already July, and Zibra has no mass-production capabilities. Sherman’s and Scott Pyle’s anxiety shifts from making the sale to figuring out how to satisfy their customer. At least they have one — the world’s largest home-improvement retailer.

The idea behind the Open It — now available for about $10 in 20,000 stores nationwide, including Walgreens, Target and Bed Bath & Beyond, and on Amazon.com — came not from testosterone-driven gearheads but a gaggle of frustrated females. There’s nothing new about using focus groups, but Sherman has built a profitable $8 million business around more or less permanent teams, dubbed Because Women Know, that discuss problems the women share and ideas for products to solve them. He started the first in Charlotte five years ago and added a second in Chicago, where Pyle was living, a year later.

In addition to generating ideas — most turn out to be dead ends — the women provide input that leads to design changes during product development. Those who are the most involved might get a small cut of the profit, but most do it for the camaraderie and small gifts distributed at meetings. “It’s like a fun social event and an interesting business meeting,” says Alison Walker, part of the Charlotte group since it started. A wife and mother of two, she works part time doing medical transcription at home. “I love knowing that I have input in creating new products.”

Sherman’s interest is more mercenary, but Zibra also gives him focus and a reason to get out of the house. He sold Oldham Saw Co., seven years ago and left the company a year later at age 44. He had planned to take some time off. It didn’t work out that way.

On his first day of freedom, Sherman rose before the sun and drove to a nearby gym for his morning workout. After pumping iron, he picked up a USA Today, looking forward to a lazy day around his house on a quiet cul-de-sac near Lake Norman. Sitting at the kitchen table, he started leafing through the paper. Before long, his heart started racing. Sweat seeped from his palms. Scared and confused, he wondered, “What am I going to do now?” He went into his home office and fired up the computer — comfortingly familiar steps in his workaday routine. His hands dried. His heartbeat slowed to a stroll. “Probably within 20 minutes, I thought, ‘You know what, I’ve just got to figure out a new business.’”

He kept coming across information about women influencing purchases. By one estimate, they make 83% of consumer decisions. “I thought, ‘If I’m going to start a business, what better demographic to target?’” But despite having a mother, sister, wife and two daughters — whose names, Zia and Brianna, Zibra combines — he knew little about what women want or how they think. After growing up in western New York and earning a bachelor’s in accounting from Frostburg State University in Maryland, he had joined the family business, which made saw blades and router bits in Burt, N.Y., and later moved it to West Jefferson. “The challenge was: How do I get a female’s softer, gentler perspective when for 20 years I worked with 98% men?”

He sought the advice of his wife, Deanna, old colleagues and friends, including Lane Ball, whose Statesville-based Ball Advertising & Design Inc. handled much of Oldham’s advertising. After a bit of brainstorming, he and Ball decided to start a permanent women’s focus group. Ball enlisted his wife, Liz, a former elementary-school teacher. She recruited a few friends, and the first meeting took place in 2004. It was a hit. “Men bond in victory; women bond in suffering,” Ball says. “If you go to women and ask them what problems they encounter in their home, they gravitate towards sharing their experiences, so the group created a perfect dynamic.”

Sherman says the repeated interaction reduces inhibitions and encourages feedback that might not occur in a regular focus group. Howard Aldrich, a sociology professor at UNC Chapel Hill, agrees. “Groups develop cultures in which people learn to speak to each other in a kind of shorthand, and after a while their shared history makes communication much more efficient. Repeated interactions, under the right conditions, raise the level of comfort and trust in a group.”

After the Charlotte group got going, Sherman and Ball asked Pyle’s wife to start one in Chicago. They tried to keep them as diverse as possible, inviting women of a variety of ages and backgrounds. They also limited them to about 10 women, so everybody could sit around a table. Meetings were held every three months — no men allowed — and videotaped for Sherman to review. Many early ideas sounded good but weren’t practical. “Either we couldn’t handle the distribution or the market was already dominated by another company,” he says. “We went through a lot of ideas trying to determine the best one to build a business platform off of.”

They took a break over the holidays, then reconvened in January 2006. One of the Chicago group mentioned how much trouble she had trying to open some of her kids’ plastic-encased Christmas toys. That sparked more discussion, and members decided a new tool was needed. The Charlotte group agreed that it seemed like a winning idea. Sherman hired engineers to design prototypes, the first few, essentially heavy-duty scissors. “As guys, we were basically thinking like Tim ‘The Tool Man’ Taylor: just make it bigger and more powerful.” Shown the prototypes, the women pointed out that it should be smaller and more streamlined to fit a woman’s palm. They suggested adding a retractable utility knife to open boxes and a screwdriver to open battery compartments. The tool has angled, offset jaws to clip just the edges. “Whenever you use a pair of scissors and cut the side of a package, your hand will run into the sharp plastic edges. That doesn’t happen with the Open It.”

After months of tweaking and fine-tuning, Sherman went looking for buyers. He enlisted contacts in a variety of fields, including logistics, accounting, branding and supply-chain management. They agreed to work for free a few hours on nights and weekends until the company started generating enough revenue to hire them. “The executives that we started with had about 126 years of experience in dealing with retail trade. So we had a huge leg up to get in the door.”

After winning over the buyer, Sherman’s team scrambled to ramp up production and managed to get the tool into 1,000 Home Depot stores by Thanksgiving. They sold out in a month. “He would have bought them for every store in the country, but we just couldn’t make enough.” Next came Walgreens drugstore chain. Bed Bath & Beyond launched the product nationwide in late 2007. The tool was featured on HGTV, and Rachael Ray touted it on her television show as a must-have Christmas gift. The Open It still contributes about 70% of Zibra’s profit, but the company has a line of painting products slated to hit 1,900 Home Depot stores this summer. Later this year, Zibra will introduce two products designed to open a variety of containers with twist caps and pop-tops.

The company has launched focus groups in Buffalo, N.Y., and Phoenix, and it’s reaching out to women via its Web site and a referral program to create a Because Women Know virtual village. About 400 have signed up. If a woman is involved in a product from the idea stage until it reaches market, she shares some of the profit. Last year, 15 did. While sales and networking groups have grown, Zibra remains a small company with only five full-time employees. Each works from home as far away as Reno, Nev. Manufacturing is outsourced to China. The decentralized structure allows the company to be more nimble and responsive, Sherman says. Recession has affected sales, particularly in stores with less foot traffic, but the company is still growing. “We’re a little behind where I expected to be at this time, but given the economy and everything, I’m certainly not disappointed.”

After 20 years in a larger company — Oldham Saw employed about 300 — he prefers Zibra’s structure. But not all the changes in his life have been pleasant. His 20-year marriage ended in 2006. “I’m not sure my ex was happy with all the hours I worked throughout my career. At times, I think she would have been a lot happier if I had just retired.”

While the female psyche remains a mystery, Sherman, who will turn 50 in October, claims to have gained insight into how women shop. Take, for example, buying a camera. “The salesman usually talks about things like pixels, zoom, lenses and other features. To a guy, who buys cars and loves horsepower, they want the most of everything. That’s going to trip a guy’s trigger. But all a woman wants to know is, ‘Will it take a great picture of my son playing soccer?’ Women are more driven by the experience of using a product than the product itself. But does all that mean I understand women now? No, not at all.”